Brands competition for shelf space is increasing in the big retail chains to ensure they stay in the minds of consumers and to procure potential income; however, it is not an easy thing to accomplish.
Shelf space has a hierarchy that follows certain consumer criteria and retailers have become increasingly selective when the time comes to decide the exhibition layout of products, frequently forcing suppliers to sign demanding delivery agreements that pressure them to keep a breast with the demand.
These delivery agreements can prove to be overwhelming because suppliers are forced to compete to meet deadlines, sometimes they must even ship less than truckloads or face the risk of paying costly fees for breaching the agreement.
Fortunately, Brands do not have to choose between unpredictable freight costs and costly fees. Retail consolidation allows companies to save in freight costs and lower the fees by using a sole supply network.
A shared supply chain means you can stop worrying about high freight costs and fees, to the point that some companies do not mind sharing their freight with rivals, on the contrary, they understand that is better to compete at the store than at the supply chain.
For example, if a company wants to ship products to a retail store but does not have enough product to fill up a full truck, it can place its cargo with that of another brand that is shipping products to the same client.
Benefits of sharing shipments
Thanks to what is also known as consolidation at place of origin, suppliers and retailers can benefit greatly:
1. Procuring cheaper rates
By consolidating shipments from different suppliers sending products to the same (or nearby) distribution centers, companies can access better freight rates in addition to splitting expenses among suppliers.
2. Procuring less damage
By combining cargoes in one truckload we can improve the capacity, lower the of handling products, and lower the risk of damage.
3. Improving the fulfillment of the demand
With retail consolidation we can buy products from different suppliers and send them to a regional consolidation warehouse or pick up goods at several stops. This allows companies to place smaller and more frequent purchase orders, meet arrival deadlines, and expedite deliveries.
4. Focusing on core business
By implementing retail consolidation, we can lower the amount of time and work dedicated to receiving shipments and we can minimize interruptions in the flow; therefore, companies may focus on the needs of their clients.
5. Lowering the carbon footprint.
Optimizing shipment through cargo consolidation helps us need less vehicles that release carbon dioxide.
E- Commerce and Consolidation
Retail consolidation also raises our capacity to place different products clients purchase online in one single package, which results in packaging and shipment savings and in an increase in customer satisfaction.
When we speak about a retailer that keeps all its goods in a single place, there will not be any issues with shipment because we only need to find the products in the inventory and put them in a box. However, in the Omni channel model consolidation becomes a huge challenge because we need to have an excellent order management system that includes the feature to consolidate products. By doing this, we can find goods in different locations and we can avoid creating packages in every dispatch warehouse. The goal is to keep freight costs below the total value of goods.
Solistica, a solution customized for every shipment
Solistica has a retail consolidation system, a solution for end-to-end management of shipments from the Distribution Centers to Retailers that guarantees the optimization of service levels and flexibility in deliveries.
Cargo consolidation focuses on the specific requirements of every cargo in order to carry out efficient deliveries that meet delivery windows, visibility, delivery proof, risk management, cold chain management, inventoried deliveries, attention to which cargo is placed next to another, and cross dock, among other criteria.
There is no question that working with a Logistics company that offers consolidation services, like Solistica, results in lower expenses, fees, damage, loss, and carbon emissions, which in turn improves customer satisfaction because clients know they can find any product they want whenever they want it.
